This subproject is one of many research subprojects utilizing the resources provided by a Center grant funded by NIH/NCRR. Primary support for the subproject and the subproject's principal investigator may have been provided by other sources, including other NIH sources. The Total Cost listed for the subproject likely represents the estimated amount of Center infrastructure utilized by the subproject, not direct funding provided by the NCRR grant to the subproject or subproject staff. We have developed multiple stable cell lines containing subgenomic HCV RNA that are resistant to treatment with interferon alpha (IFN-[unreadable]). Characterization of these IFN-[unreadable] resistant replicon cells showed defects in the phosphorylation and nuclear translocation of STAT1 and STAT2 proteins due to a defective Jak-STAT pathway. In this study, we have developed an alternative strategy to overcome interferon resistance in a cell culture model by improving intracellular STAT1 signaling. An engineered STAT1-CC molecule with double cysteine substitutions in the Src-homology 2 (SH2) domains of STAT1 (at Ala-656 and Asn-658) efficiently phosphorylates and translocates to the nucleus of IFN-resistant cells in an IFN-[unreadable] dependent manner. Transfection of a plasmid clone containing STAT1-CC significantly activated the GAS promoter compared to wild type STAT1 and STAT3. The activity of the engineered STAT1-CC is dependent upon the phosphorylation of tyrosine residue 701, since the construct with a substituted phenylalanine residue at position 701 (STAT1-CC-Y701F) failed to activate GAS promoter in the replicon cells. Intracellular expression of STAT1-CC protein showed phosphorylation and nuclear translocation in the resistant cell line after IFN-[unreadable] treatment. Transient transfection of STAT1-CC plasmid clone into an interferon resistant cell line resulted in inhibition of viral replication and viral clearance in an IFN-[unreadable] dependent manner. Furthermore, the resistant replicon cells transfected with STAT1-CC constructs significantly up regulated surface HLA-1 expression when compared to the wild type and Y to F mutant controls. These results suggest that modification of the SH2 domain of the STAT1 molecule allows for improved IFN-[unreadable] signaling through increased STAT1 phosphorylation, nuclear translocation, HLA-1 surface expression, and prolonged interferon antiviral gene activation.